In February 2023, the VDAB requested “urgent advice” by email about the “recovery of subsidies” from an external law firm. “The cabinet would like to discuss this problem tomorrow,” says email traffic that our editors were able to view.
In the emails, the VDAB lawyer wrote that a financial audit had been carried out at external partners who supervise people with a work disability for the VDAB. It was the first large-scale audit – after an initial test audit – since the start of the subsidies in 2008. The partners, who offer Specialized Training, Guidance and Mediation (GOB), could not justify 10 million euros in costs, the internal financial statements showed. audit for the years 2019 to 2021. This concerned costs that were “not related to the subsidized activities”, costs that were “charged twice under different items” and overhead costs that were “overestimated”.
Dading
Initially, the VDAB assumed that it was obliged to reclaim these costs from the organizations. Nevertheless, people started looking for ways to waive the amount, as is evident from emails in which various options were discussed. In the advice of March 14, 2023, the law firm reminded the VDAB that the subsidy granting government is bound to a recovery if the subsidies were not used for the purposes, but the possibility of a settlement is also discussed.
According to our conversations with the non-profit organizations involved, a “collective indignation in the sector” had arisen after they received emails from the VDAB with the amount that they could not justify. For the non-profit organization Emino, that amount was more than 5 million euros. The non-profit organizations disputed these amounts and sought hearing from VDAB itself. “We immediately contested that. They listened to us and announced that the VDAB would review this with the financial service.”
They also went to the cabinet of Flemish Minister of Work Jo Brouns (CD&V). “We have spoken to the cabinet about this and expressed our concerns. There was a need for support from the cabinet to maintain confidence.” Another organization says: “Afterwards the recovery disappeared.”
New calculation
After the discussions with the partners, the VDAB decided, in consultation with the external law firm, to recalculate the financial control. The VDAB announced by email that a different method of calculation, the so-called simplified cost option, could lead to a different result, although a refund was still on the table. “Either we stick to the initial amount that we wanted to recover. The other option is that we immediately start reclaiming based on the new calculation. The risk is that the GOBs would not agree to this. Then we will still have to make concessions in order to reach a settlement.”
The new calculation, based on simplified costs, allowed more costs to be covered without detailed justification. The formula is laid down in European regulations. In the VDAB’s recalculation, a residual amount of just under 600,000 euros ultimately remained for all non-profit organizations for which no accountability could be given. That amount falls within the margin of error that this European formula allows. The remaining amount was considered negligible. The claim of 10 million euros had disappeared.
The VDAB found validation for this second calculation method from an external audit agency and again sent emails to the partner organizations with the message that “there are sufficient proven costs. All financial resources received may therefore be considered acquired.” While reading the email, one of the partners felt “lucky that we had understood each other”. “The government had confidence that we were using these resources correctly.”
Where did that 10 million euros go? In an email to the VDAB, Emino’s general manager, Christel Witgeers, argued: “The subsidized activity does not simply consist of offering specialized courses.” She mentions, among other things, training, job hunting and a career exploration internship. “It goes without saying that, in order to guarantee the proper functioning of the processes, Emino vzw must also focus on innovation, research and investments for the benefit of clients and the target group.”
© eva
The partners received a subsidy of 5,000 euros each for the guidance of a job seeker with a work disability. One of the non-profit organizations indicates that it was a “considerable amount that was more than we spent”. “We put that in a fund for the following year, for processes that run over several years. There has never been a surplus for us.”
“Sometimes you have longer and more expensive processes, and then you need more budget,” says another non-profit organization. He criticizes the lack of control over performance. “There were a number of GOBs that performed less than average. If you do not monitor the content properly, some people will lie in the hammock. The outcome of the activities is then no longer important.”
Inadequate performance
This observation had already been made in the summer of 2021, when the Court of Audit published a sobering report on the outsourcing policy at the VDAB. “The way in which the VDAB organizes, manages and monitors services through partners shows major shortcomings that jeopardize efficient implementation and follow-up.” Specifically regarding GOB, the Court of Audit states that this approach “did not contribute above and beyond the average chance of outflow to work”. The Court of Audit also pointed out that the VDAB did not sufficiently monitor performance. “The most important objective is apparently reaching and attracting sufficient job seekers, rather than creating employment.”
In those three years, the VDAB issued subsidies for 14,199 pathways, but only 6,985 pathways for job seekers with a work disability were started. The most recent figures on the outflow to work date from the 2018 annual report: 41 percent of the programs started were able to guide job seekers with a work disability to the labor market.
The entire system of subsidies for GOBs was reformed. Since last year, we no longer work with subsidies, but with government contracts, under the name Glow, an abbreviation for Growing and Learning on the Workplace. This tender allows for more tailor-made financing, with a result obligation. Instead of a fixed subsidy of 5,000 euros per trajectory, there is now an average trajectory price of 3,000 euros, which can rise to 9,350 euros if there are multiple problems and an age over 55 years.
The fact that project-based subsidies are used for more indirect costs is not that unusual, says Ludo Struyven, professor at the Leuven Research Institute for Labor and Society Hiva. “Everything depends on the agreements between the payer and the recipient. Subsidies allow a lot of room for negotiation in that area.”
The fact that there was initially a possible recovery, but no longer after discussions with the sector, points to something else. “It characterizes the difficult transition from a subsidy to a tender system,” says Struyven. “For the VDAB, this transition also entails a shift from actor to director. It has been a question for some time that the VDAB would enter into outsourcing in a more objectifying manner.”
Our sister newspaper De Standaard contacted six non-profit organizations and spoke to four of them, with the emphatic statement that the conversation was on the record. However, they withdrew their quotes before publication.
response vdab
“There has never been any formal recovery”
“Initially we worked with a methodology that was insufficient to demonstrate the expenditure of resources with sufficient reliability,” says VDAB spokesperson Joke Van Bommel. “This became apparent during the financial audit process, in which the partners were able to provide their answers. The insights of the rebuttal have taught us that this method was not sufficient enough. In a second analysis we used a similarly validated, different methodology, that of the simplified cost option. This shows that the resources have been spent correctly. The GOBs have been able to demonstrate all expenses within a negligible margin of error. Based on that first, incomplete analysis is therefore not a correct representation.”
“There has never been a formal decision to reclaim. It was especially important for the VDAB that we make a decision that was audit-proof and legally sound. And that is exactly what happened.”
“The VDAB can state in good conscience that there is no political pressure whatsoever. They did ask the cabinet to remain informed about the decision we would make, and to pay extra attention to a legally correct process.”
response from Cabinet Jo Brouns
“Insisted on a legal basis”
“The VDAB invited the partners to provide explanations and came to the conclusion that it was better to use a different accounting approach and that a recovery was not an option,” says Bram Bombeek, spokesperson for the Minister of Labor. Jo Brouns (CD&V). “The only thing we have insisted on is that the decision – whatever it is – be legally substantiated. That’s just good governance.”
“More transparency and effectiveness in the field of subsidies is an absolute priority for us and there is a clear break with the past here. Support for the GOB partners existed since 2008 and has now been thoroughly reformed. For the guidance of job seekers, it is no longer about pure subsidies, but the GOBs, like other partners, must participate in a “tender” in the market, in which we really look at whether all objectives are achieved. Everything has also become much more transparent in accounting since January 2022.”